Correlation Between Al Aqar and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both Al Aqar and Lyc Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Al Aqar and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Aqar Healthcare and Lyc Healthcare Bhd, you can compare the effects of market volatilities on Al Aqar and Lyc Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Al Aqar with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Lyc Healthcare.
Diversification Opportunities for Al Aqar and Lyc Healthcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 5116 and Lyc is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare and Lyc Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyc Healthcare Bhd and Al Aqar is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Al Aqar Healthcare are associated (or correlated) with Lyc Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyc Healthcare Bhd has no effect on the direction of Al Aqar i.e., Al Aqar and Lyc Healthcare go up and down completely randomly.
Pair Corralation between Al Aqar and Lyc Healthcare
Assuming the 90 days trading horizon Al Aqar Healthcare is expected to generate 0.24 times more return on investment than Lyc Healthcare. However, Al Aqar Healthcare is 4.17 times less risky than Lyc Healthcare. It trades about 0.04 of its potential returns per unit of risk. Lyc Healthcare Bhd is currently generating about -0.04 per unit of risk. If you would invest 121.00 in Al Aqar Healthcare on August 31, 2024 and sell it today you would earn a total of 17.00 from holding Al Aqar Healthcare or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Lyc Healthcare Bhd
Performance |
| Timeline |
| Al Aqar Healthcare |
| Lyc Healthcare Bhd |
Al Aqar and Lyc Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Al Aqar and Lyc Healthcare
The main advantage of trading using opposite Al Aqar and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar position performs unexpectedly, Lyc Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lyc Healthcare will offset losses from the drop in Lyc Healthcare's long position.| Al Aqar vs. YTL Hospitality REIT | Al Aqar vs. Digistar Bhd | Al Aqar vs. Minetech Resources Bhd | Al Aqar vs. Swift Haulage Bhd |
| Lyc Healthcare vs. IHH Healthcare Bhd | Lyc Healthcare vs. KPJ Healthcare Bhd | Lyc Healthcare vs. Digistar Bhd | Lyc Healthcare vs. Minetech Resources Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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